Philadelphia Unions Want City to Start Taxing Nonprofits

A state Supreme Court ruling in the spring seems to give the city more power to challenge an organization's tax-exempt qualifications.

A group of activists and union leaders wants Mayor Nutter to make Philly's nonprofit organizations to prove they deserve to get a pass on paying property taxes.

"We want to be sure the city is trying to capture as much revenue as [it's] entitled to," said Cathy Scott, president of the American Federation of State, County and Municipal Employees' District Council 47, which represents the city's white-collar workers.

For years, most nonprofit institutions, including the University of Pennsylvania, Drexel University and Thomas Jefferson University, have paid little to no taxes due to their nonprofit status. But a state Supreme Court ruling in the spring seems to give the city more power to challenge an organization's tax-exempt qualifications.

Scott said Nutter should send tax bills to all property owners this winter and have the nonprofits show they deserve exemptions based on standards established by the courts. Scott was joined at the City Hall news conference by the group Philadelphia Jobs with Justice, fire union president Bill Gault and other union officials.

The city has roughly 4,700 tax-exempt properties owned and used by nonprofits, Finance Director Rob Dubow said.

Dubow would not commit about whether the city would send bills to all nonprofits. He said the administration was still reviewing the state Supreme Court ruling.

"We're are looking into it and we are figuring out the appropriate approach. It's a complicated issue," Dubow said. Scott's call for a tougher look at nonprofits comes as city blue- and white-collar workers are getting increasingly restless about not having new contracts. They have been working under the terms of expired contracts since 2009.

Nutter has said he wants cost-saving concessions, including furlough days, which the union has resisted. The city is also appealing an arbitration award for firefighters, on the grounds that it is too costly.

Still, Scott said this push was not just about getting money for their contracts but for providing "essential services."

To see a map of the city's nonprofit, tax-exempt properties, go to philly.com/ExemptMap.